Expertview: Industrial output slips 0.4% in Sept

Nov 15 2012, 04:04 IST
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SummaryAn ugly print. Hence it is likely to raise expectation of an earlier action by the RBI, especially if it accompanied by a weaker inflation print on November 14th.

ANUBHUTI SAHAY,

ECONOMIST, STANDARD CHARTERED BANK, MUMBAI

“An ugly print. Hence it is likely to raise expectation of an earlier action by the RBI, especially if it accompanied by a weaker inflation print on November 14th. However it is important to remember that IIP has been a pretty erratic series in the past. We will focus on the WPI number and expect the first repo rate cut in Q1 2013.”

SUJAN HAJRA,

CHIEF ECONOMIST, ANAND RATHI SECURITIES, MUMBAI

“This month’s factory output data is a negative surprise. We were expecting a rise of 2.5%. But monthly industrial production data is volatile, and it is difficult to give a long-term guidance based on one month’s number. We still maintain our view that there will be some amount of industrial recovery in the second half of the current fiscal year ending in March. For the full year, we expect a rise of 4%.”

INDRANIL PAN,

CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI

“Everything put together, the growth factor could incrementally put more pressure on the Reserve Bank of India to cut interest rates, and when they see inflation easing in the next few months, as is the expectation, that is when they will cut rates.However, next month, we are expecting a bounce in the factory output number because of the pre-Diwali demand.”

SHAKTI SATAPATHY,

ANALYST, AK CAPITAL, MUMBAI

“The biased data is largely due to volatile capital goods sector. However, the other sub indices, including basic goods and intermediate goods signal a stability in the growth numbers. Further the PMI reading somehow defies any sharp drop in the growth expectation. Having said that, we believe this is high time for the central government to restore the investment sentiment by implementing and introducing some more policy stimulus, thus addressing the growth risk from the beginning of next fiscal (year). The number would hardly move the RBI in revisiting their stance given the volatile nature of the production data.”

MOSES HARDING,

HEAD OF ASSET-LIABILITY MANAGEMENT, INDUSIND BANK, MUMBAI

“The trend in growth and inflation is clear; downward pressure on growth and uptrend on inflation into the near term. So, no surprises from the IIP number and it is high time RBI gets into balancing act between growth and inflation.”

ANJALI VERMA,

ECONOMIST, MF GLOBAL, MUMBAI

“Typically, some kind of inventory buildup also happens in September, so the numbers are all the more disappointing. On the other hand, CPI (consumer price inflation) continues to remain high. Going by RBI’s guidance, the IIP numbers

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